The market has been going up, or holding steady in spite of the upcoming fiscal cliff. Is the market telling us that it will be resolved? They say the market is smarter than any one person.

mark19601962:
The market has been going up, or holding steady in spite of the upcoming fiscal cliff.

The metaphor of the "fiscal cliff" is propaganda. Yes, the days of the current monetary regime are numbered, and its end will probably be ugly, but it's not going to end as a result of something Congress does or doesn't do this year, or any year. The ritualistic hysteria in Washington DC we see every year is manufactured to convince us that serious debate about meaningful solutions is taking place and that our political donations are needed now more than ever, so that [insert your Congressman's name] can keep on fighting the good fight. Once the lekking starts, everyone must join in or risk losing the fundraising battle. In reality, there is less that any politician can do about the US government's debt and the inherent problems with statism in general than ever before.

Is the market telling us that it will be resolved?

If by "resolved" you mean the debt ceiling will be raised, tax rates will go up, overall spending will increase even more (but not by enough to stop any politician from complaining about draconian cuts to this or that), and the Federal Reserve will keep printing money, then yes, it's telling us that it will be resolved the same way the government has been diligently resolving the debt problem for decades.

As the supply of dollars heads to infinity, the prices of all assets inevitably will too, and stock prices are no exception, provided there remains enough order in society to sort out who owns which shares and enforce corporate contracts. (Obviously not all prices will rise equally, and not all or even many assets will produce real positive returns.)

Robbie Geary

They say the market is smarter than any one person.

They say is a cause for grave suspicion. I do not trust They say at all. Just who are They? IMAO, they are a bunch of lazy duffers that cannot be bothered to ever justify what they say. It seems to me that the market is composed of a vast number of different players. Some of them may be quite brilliant in their way, but none infallible. The rest are just a mob of sheep, with a considerable portion of corrupt rabble-rousers who manipulate the rest of the mob. To ascribe wisdom to such a population seems to me to be the height of folly.

They say the market is smarter than any one person.

They say is a cause for grave suspicion. I do not trust They say at all. Just who are They?

"They" are the collective wisdom of the crowd, the same force that makes the market smarter than any one person. This becomes a fine example of begging the question.

- Jamie

... the upcoming fiscal cliff...

Technically, we've already gone over the cliff. Congress & the President could have an agreement today. But by the time the bill goes through the writing process, voting, etc., it would be after January 1.

The question is, how long do we stay over the cliff?

JLC